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Pakistan Will Still Seek IMF Bailout After Saudi Support Package

(Bloomberg) -- Pakistan will still seek an International Monetary Fund bailout even after it secured a $6 billion in financial support from Saudi Arabia.

Islamabad will now negotiate with the IMF from an “improved position,” Finance Ministry spokesman Noor Ahmed told Bloomberg by phone on Wednesday. An IMF program will help boost discipline in the economy, he said.

“We’ll have to go to IMF,” Ahmed said. The Saudi Arabian package “is something you strengthened your position for talks.”

Pakistan said late Tuesday that Saudi Arabia will deposit $3 billion directly“as balance of payment support,” while another one-year deferred payment facility of up to $3 billion for oil imports was agreed. “This arrangement will be in place for three years, which will be reviewed thereafter,” Pakistan’s Finance Ministry said in a statement.

Despite his government announcing earlier this month it will seek assistance from the IMF, Prime Minister Imran Khan has again recently voiced his reluctance to turn to the fund for Pakistan’s 13th bailout since the late 1980s. South Asia’s second-largest economy is facing its latest balance-of-payments crisis as imports for Chinese-financed infrastructure projects rise while its exports lag the region.